Orioles Sale to Rubenstein Just the Fifth MLB Deal in 12 Years
Baseball’s Opening Day arrives with a new boss in Baltimore after owners unanimously approved the sale of the Orioles on Wednesday to a group led by Carlyle Group co-founder David Rubenstein at a valuation of $1.725 billion, the third highest ever for baseball. The Orioles ranked 18th in Sportico’s just-released MLB team valuations.
Rubenstein’s group includes Ares Management co-founder Michael Arougheti, former New York City Mayor Michael Bloomberg, Basketball Hall of Famer Grant Hill and Orioles legend Cal Ripken Jr. The initial purchase is for 38% of the team, with Rubenstein expected to buy the remaining roughly 30% owned by the Angelos family after the death of family patriarch Peter last week. The remaining limited partners have “tag-along” rights if they want to sell.
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The Rubenstein deal marks just the fifth time since the start of 2013 that a control ownership stake in an MLB team was sold. The pace stands in sharp contrast to the NBA (12 sales, including four last year), NHL (12 sales, including expansion and three Arizona Coyotes transactions) and MLS (16 new ownership groups, including expansion) over the same time period. NWSL has had almost 100% turnover among its control owners in just four years.
Historically, the NFL stands alone in its pace of sales with the average ownership tenure at 41 years—MLB’s is 21. Eleven NFL teams have had the same family ownership longer than baseball’s most-tenured owners—the Steinbrenners have owned New York Yankees since 1973.
MLB is most affected by the decline of regional sports networks due to its reliance on local media, which represented 21% of revenue last year. The current RSN climate had impacts on offers for the Washington Nationals and Los Angeles Angels when they hired bankers in 2022 to sell the clubs. Both teams were pulled off the market.
Yet the slower pace of MLB sales largely reflects the natural cycle of turnover in major sports leagues not named NFL. Sixteen of MLB’s current owners purchased their teams between 2000 and 2012.
The recent crop of new MLB owners has not had big annual increases in franchise values compared to the deals in the 1990s and 2000s. The best return is for the longest-tenured owner, with the Yankees now worth $7.93 billion, a 14.3% annual gain on the $8.8 million George Steinbrenner’s group paid in 1973. Jim Crane is second at 13.6% for his 2011 purchase of the Houston Astros.
Here is a look at the last four MLB team sales and how the owners have fared on and off the field.
New York Mets (Steve Cohen: 2020) | Price paid: $2.42 billion | Current value: $2.91 billion
“It’s better than a bridge being named after you,” Cohen quipped during 2022 spring training after a new luxury tax tier with punitive penalties nicknamed the “Cohen tax” was part of MLB’s collective bargaining agreement.
Cohen set an MLB-record price with his Mets purchase. Other owners worried that he would use his vast wealth—which at $19.8 billion (per Forbes) is three times as much as any other MLB owner—to corner the market on top free agents. Cohen paid a $31 million luxury tax bill in 2022, and then really opened his wallet in 2023 with a $375 million payroll that shattered the previous record of $300 million, which the Mets had set the previous season. It triggered a $101 million tax bill.
Cohen can afford it. He made $1.7 billion in personal capital gains in 2022 through his hedge fund Point72, according to Institutional Investor’s annual tally. He made $1.6 billion last year.
The Mets won 101 games in 2022 and opened last season with high hopes based on the record payroll and pitching duo of Max Scherzer and Justin Verlander, who had matching salaries worth $43.3 million, tops in MLB. The club struggled, both pitchers were traded, and the team finished 75-87.
Kansas City Royals (John Sherman: 2019) | Price paid: $1 billion | Current value: $1.31 billion
Sherman bought the team from David Glass for $1 billion, and most bankers thought it was a below-market price triggered by Glass, who had been dealing with health issues and died the following year, being intent on a buyer he knew would keep the team in Kansas City long-term.
The team’s home, Kauffman Stadium, opened in 1973, and Sherman is working on a new $2 billion development with a modern stadium as its centerpiece. Jackson County residents head to the polls next week to vote on whether to fund their contribution via a sales tax.
The Royals have lost at least 100 games in three of the past six seasons.
Florida Marlins (Bruce Sherman: 2018) | Price paid: $1.2 billion | Current value: $1.23 billion
Sherman’s original ownership group included Derek Jeter, who held a 4% stake and served as the team’s CEO. In 2022, Jeter stepped down from his role and sold his interest in the team. The Marlins have struggled to attract fans to LoanDepot Park and are consistently the biggest beneficiary of MLB’s revenue sharing system with annual checks of more than $50 million.
Attendance rose 28% last year as the team made the wild-card round of the playoffs behind National League batting champion Luis Arraez.
Seattle Mariners (John Stanton: 2016) | Price paid: $1.4 billion | Current value: $1.92 billion
Stanton was already a minority investor in the team and took control in 2016 when Nintendo of America decided to sell most of its remaining stake. It was the first transfer of control in MLB since the San Diego Padres sale in 2012.
The Mariners' value has risen at an average annual rate of 4% since 2016, but the club is facing headwinds with its RSN situation. The club acquired the 29% interest in Root Sports Northwest it didn’t already own last year when Warner Bros. Discovery decided to get out of the RSN business. The Mariners now own 100% of the network that carries a high rights fee for their games, but cash flow at the network has plummeted from a $64 million profit in 2019 to a $19 million loss in 2023, according to Kagan Research.
In 2022, the Mariners broke a streak of 20 seasons not making the playoffs, which had been the longest active postseason drought in major U.S. sports.
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